Thames Water creditors open to public control talks, prepare for legal fight
9 reported
A consortium of investors holding £17bn of Thames Water’s £21bn debt has expressed willingness to discuss greater public control of the company but is also preparing for a potential legal battle, amid reports that incoming prime minister Andy Burnham could temporarily nationalise the utility. The group, London & Valley Water (L&VW), said it is open to government involvement but not public ownership. Mike McTighe, the corporate troubleshooter leading the governance overhaul for Thames, stated the consortium wants to work constructively with Burnham. Burnham said last month there should be “greater public control” of Thames Water and told the Guardian this could mean nationalisation. The consortium has hired law firms Pallas Partners and Akin Gump as a precautionary measure, though no legal action has been taken. The future of Thames Water, which serves 16 million customers, is expected to be a pressing issue for Burnham when he takes office.
What’s reported
London & Valley Water (L&VW) is a consortium of 100 institutional investors holding £17bn of Thames Water’s £21bn debt.
The consortium is open to government involvement but not public ownership.
Mike McTighe, likely to become Thames Water chair if the consortium’s £10bn rescue deal is approved, said they want to work with Burnham.
Burnham said last month there should be “greater public control” and told the Guardian this could mean nationalisation.
A special administration regime (SAR) proposal would transfer running costs to taxpayers, with creditors claiming the bill could be £2bn.
The consortium has hired Pallas Partners and Akin Gump as a precautionary legal measure; no legal action has been taken.
Thames Water serves 16 million customers in London and the Thames valley.
The lenders have been trying to take ownership after a failed sale to KKR last year.
Environment secretary Emma Reynolds wrote to Ofwat voicing concerns about the deal terms.
Key figures
Mike McTighe: corporate troubleshooter leading governance overhaul, likely to become Thames Water chair if rescue deal approved; also chairman of Openreach and previously chaired Daily Telegraph’s publisher.
Andy Burnham: incoming prime minister.
Emma Reynolds: environment secretary.
Apollo Global Management, Elliott Management, Farallon Capital Management, Silver Point Capital: fund managers in the L&VW consortium.
Sources: The Guardian
